Vera Bradley Reports 25% Drop in Second-Quarter Profit
September 02 2015 - 8:55AM
Dow Jones News
By Lisa Beilfuss
Vera Bradley Inc. said profit tumbled in its latest quarter, as
the handbag retailer continues to struggle to turn itself around
amid lower traffic and a steep drop in a key sales metric.
Results, however, beat the company's downbeat guidance and the
company lifted its full-year guidance.
Vera Bradley, which has traditionally relied on its
cotton-quilted products to drive business, has been struggling to
sell customers on a revamped assortment of laser-cut, leather and
microfiber handbags. Chief Executive Robert Wallstrom has
acknowledged that the company hasn't attracted enough new customers
to the brand, and the CEO has expressed frustration that the
progress the company has made isn't showing up in its
financials.
The company has also been trying to reign in profit-eating
promotions. Other handbag retailers, including Coach Inc. and Kate
Spade & Co., have similarly worked to cut discounts, but with
mixed results.
Mr. Wallstrom on Wednesday said Vera's same-store sales trend
began to improve toward the end of the quarter, thanks to new
product offerings. Still, second-quarter sales at stores open at
least a year plunged 15% while online sales dropped by a similar
rate, amid lower traffic and reduced promotional activity.
"We have made meaningful progress but know our turnaround will
take time, " the CEO said.
Overall, Vera reported a profit of $5.7 million, or 15 cents a
share, down from $7.6 million, or 19 cents, a year earlier. Revenue
edged 1.5% higher to $120.7 million.
The company had guided for per-share earnings of 10 cents to 13
cents on revenue of $116 million to $120 million.
The retailer, which earlier slashed its outlook for the year,
now expects to report 72 cents to 78 cents in earnings per share,
up from earlier guidance of 64 cents to 74 cents and above the 66
cents analysts have predicted.
Shares in the company, which have erased about 49% this year,
were inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 02, 2015 08:40 ET (12:40 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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